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Mind the gap

A report by the Office of National Statistics on the gender pay gap has been welcomed by Government with the Chancellor suggesting that the figures published are another sign of progress in the fight for equal pay. The Government has also proposed that by Autumn 2016, those with over 250 staff will be required to report and publish information with regard to this measure.

The gender pay gap is simply a measure, by age of the difference in pay between male and female workers. The detail of this most recent report is interesting because for women in their 20s, the gender pay gap has actually reversed. For the first time, it is a negative number, meaning that women are paid more than men. A female employee working between 2006 and 2013 would be paid £1,111.00 more than their male, full-time equivalent. Matters change significantly for workers who are in their 30s. A comparative analysis reveals that a female starting full-time work at age 30 can expect to be overtaken by her male equivalent by some £8,775.00 over 10 years. Such trend continues with an increasing difference in pay as careers progress and those involved take up more senior and better paid positions. This has prompted interested parties to call for more flexibility and a radical re-think of traditional working patterns.

Implementing transparency with regard to pay will undoubtedly highlight this issue and prompt employers to consider the reasons behind the statistics which they are required to publish but it will also have commercial disadvantages. Information which would usually be regarded as confidential will be available to the workforce. Those seeking to establish a high performance culture are likely to experience tension or even find that this new reporting requirement is counter-productive. Some organisations may find themselves constrained in their ability to attract and retain talented individuals. In the commercial arena, all of these issues will require medium and long-term planning. Such considerations may not have influenced some of the large accountancy firms, who have already published their current statistics. In doing so however, they are quick to point out that the gap between men and women on the same grade is minimal and their overall statistics are not too different from the report itself.

This is a difficult issue, which is likely to be in the news, on a regular basis over the next 18 months or so. The statistics highlight a problem in progression. If industry in the United Kingdom wishes to achieve a cultural shift, it is likely to require more than transparency with regard to pay and simple succession planning. To date, one explanation advanced for the widening gulf between genders as careers progress is the theory that men negotiate better levels of remuneration on entry and presumably review. This is unlikely to account for such a large disparity, particularly when dealing with senior positions. Rather, the answer is likely to lie in working patterns. Most, if not all senior positions are currently regarded as full-time whereas statistically at least, women are more likely to take breaks in their career and take advantage of arrangements for flexible working when they return.

To achieve a genuine and sustainable change in culture, employers will need to implement transparency with regard to progression. Employers will need to consider not only transparency as to pay but also how irrespective of gender, you can achieve increased levels of pay. Transparency as to the parameters for progression and the rules of this particular game will also need to be available to employees, if employers wish to avoid the difficulties referred to above. This will involve a radical change in how most employers currently deal with promotion and progression. If the Government is to require employers to publish a report and their own statistics however, employers appear to have less to lose and more to gain by doing so.

This type of approach would also manage the legal risks which arise as well as enabling all concerned to make informed choices with regard to their careers. After all, whether someone is successful ultimately depends upon what they wanted to achieve.

This debate is likely to continue but the report from the Office of National Statistics provides an interesting insight as to the current position.

Compare jurisdictions: Employment & Labor: North America

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